Deputy chief of the National Bank of Ukraine Dmytro Solohub said that the rates on bank loans in the national currency can fall under 10% in the next five years, provided that the deposit rates are at around 5%, as well as Ukraine`s judicial and tax systems are reformed.
”If we are talking about inflation falling down to 5% in 2-3 years, and there is a change in the judicial and tax systems, then in around 5 years, the rates on hryvnia loans below 10% are really possible. Then the deposit rates will be at about 5%, and this is another challenge for bankers, whether they are able to attract deposits at such rates,” Solohub said in an exclusive interview with UNIAN.
He stressed that if one wishes to receive loans at an annual rate of under 3%, they should also be ready to deposit at 1%.
”Are you ready to deposit at the same rate? I believe the Ukrainians are not ready yet,” said Solohub.
The interest rate on the loan, as explained by the NBU deputy governor, is the rate on the deposit plus the bank`s margin, which is a measure of bank risk, which is currently at a high level due to the weakness of the Ukrainian legal system, not guaranteeing protection of creditors` rights.
As UNIAN reported earlier, the banking system of Ukraine currently has sufficient liquidity available for lending, but banks do not risk allocating funds for long-term loans due to several reasons, including the low level of investment attractiveness of Ukraine, the risks of borrowers` solvency, a significant amount of bad loans and risks of the judiciary.
Earlier, the National Bank reported that the resumption of lending is not expected before the end of 2016, subject to a number of laws to protect the rights of creditors, a judicial reform and the reform of law enforcement agencies` work with distressed borrowers.
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